Ant Group, a provider in the development of open platforms for technology-driven inclusive financial services, and the parent company of China’s largest digital payment platform Alipay, has unveiled a global trade platform. Named Trusple, it is an international trade and financial service platform powered by AntChain, the company’s blockchain-based technology solutions. Trusple aims to make it easier and less costly for all participants, particularly SMEs, to sell their products and services to customers around the world. The company says it also reduces costs for financial institutions so they can better serve their business customers.
Based on the concept of 'Trust Made Simple', Trusple works by generating a smart contract once a buyer and a seller upload a trading order on the platform. As the order is executed, the smart contract is automatically updated with key information, such as order placements, logistics, and tax refund options. Using AntChain, the buyer’s and seller’s banks will automatically process the payment settlements through the smart contract. This automated process not only mitigates the processes that banks traditionally conduct to track and verify trading orders, but also ensures information is tamper-proof. Further, successful transactions on Trusple enable SMEs to build their creditworthiness on AntChain, making it easier for them to obtain financing services from financial institutions.
“Trusple was designed to solve problems for SMEs and financial institutions involved in cross-border trading,” said Guofei Jiang, president of the Advanced Technology Business Group at Ant Group. “Just like when Alipay was introduced in 2004 as the online escrow payment solution to build trust between buyers and sellers, with the launch of AntChain-powered Trusple, we look forward to making cross-border trading safer, more reliable, and more efficient for buyers and sellers, as well as for the financial institutions that serve them.”
A lack of trust among global trading partners has traditionally made it difficult for many SMEs to do business. For buyers and sellers alike, this lack of trust can lead to delays in shipments and payment settlements, in turn placing pressure on SMEs’ financial position and cashflow. Banks that support global trading by SMEs have also faced a longstanding challenge of verifying the authenticity of orders, which has increased banking costs. To tackle these challenges in global trade, Trusple leverages AntChain technologies, including AI, Internet of Things (IoT), and secure computation, to build trust among multiple parties.
Testing the process
During the pre-launch testing period conducted this month, Jing Yuan, whose company sells glass crystal ornaments to customers around the world, completed the first transaction on the Trusple platform, sending a consignment of goods headed to Mexico. With Trusple, the same transaction that would have previously required at least a week to process, Yuan was able to receive payment the next day. “With the help of Trusple, the same amount of operating capital can now support more trading orders,” said Yuan. “I’m now aiming to grow my business by 30 percent next year.”
To help optimise cross-border processes, Trusple has partnered with various international financial institutions, including BNP Paribas, Citibank, DBS Bank, Deutsche Bank and Standard Chartered Bank. Indeed, this week Standard Chartered announced the successful completion of the first cross border live transaction on Trusple.
Underpinned by bank partnerships
By integrating its financial services with Trusple, Standard Chartered says it can offer buyers and sellers improved access to trade finance. The use of blockchain, which will be enabled in due course, also means enhanced transparency and traceability for all transactions across the entire supply chain, which reduces fraud risk and provides greater assurance, resulting in increased trust among all trade participants. Specific to the sellers, the ability to track and trace every successful transaction creates a ‘chain credit’, from which financial institutions can make use of this data to determine a seller’s credit worthiness when meeting its financing needs. In addition, the automation of all trade processes combined with seamless connectivity to Standard Chartered’s Straight2Bank digital banking platform creates a closed loop ecosystem, leading to faster turnaround times and greater cost efficiencies for businesses. As part of the initial scope in the partnership, the bank has completed the first transaction on Trusple.
“Even in today’s digital environment, the cooperative links between many businesses still remain broken," commented Ant Group's Jiang. "As we’ve demonstrated in our first transaction with Standard Chartered, blockchain technology has the potential to rebuild the collaborative trust in the digital economy and enhance operational efficiency across the industry.”
“With supply chains around the world impacted by COVID-19, now more than ever, it is critical that SMEs get the support they need to recover, grow and reignite economic growth," added Ben Hung, regional CEO, Greater China and North Asia at Standard Chartered. "This partnership with Trusple helps us to further enhance connectivity in the supply chain in Asia and provide financing to SMEs when they need it most.”
DBS has also partnered with Ant Group on the Trusple project, with the goal of providing optimal and timely working capital support to its clients.
“Our collaboration with Ant will enable the use of data to provide greater transparency into complex, fast-moving supply chains," said Tan Su Shan, group head of Institutional Banking at DBS Bank. "We can then leverage this data to deliver quicker and more cost-efficient financing to counterparties on the Trusple platform.”
According to the DBS 2020 Digital Treasurer Survey, which polled around 1,700 corporate treasurers, CEOs, CFOs and business owners across the Asia-Pacific, almost all businesses (99%) have indicated that they are facing external pressure to transform digitally, with key pressure points including changing consumption patterns from their customers and key markets, competitors and growing supply chain complexities.
As mentioned, on the Trusple platform when a digital trade order is generated by a buyer or seller, it will be automatically recorded on the blockchain. This helps enhance transparency in complex supply chains, fostering greater trust between parties which may not have transacted with each other before.
As an added safeguard, DBS, along with other member banks, will also offer payment guarantees for all goods traded on the platform, whereby the financing bank will automatically dispatch payment to the seller once the buyer digitally acknowledges the receipt of goods on Trusple. This mitigates the risk of late payments and allows suppliers to enjoy greater predictability of cash flows, enabling them to better optimise their working capital for strategic opportunities to grow their business.
Additionally, member banks can also harness insights from the transactional data between buyers and suppliers to determine the credit quality of the business and offer competitively-priced trade loans through the platform. For instance, through Trusple, DBS says it is able to facilitate applications for trade financing in real-time and offer credit lines in less than 24 hours.
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